Community Colleges: The Unsung Heroes of Higher Ed

When donors think of giving to education, they most often one thinks of K-12 education (including early learning initiatives) and higher ed—the latter being the granddaddy of all philanthropic giving. In 2018, over $45 billion were earmarked to higher-education alone, and much of it went to the investment pools (a.k.a. endowments) of elite universities.

Yet, with the constantly rising cost of education, greater numbers of students are saddled with ever-larger student loans (see Robert Smith’s big bet on relieving student debt), while others are going so far as to question the basic utility of a university education. So, it’s hard to find a place where a savvy donor can “move the needle” in higher ed.

But we are forgetting the corner of the education universe that serves more people and offers the greatest chance for economic stability and social mobility: the two-year technical and community colleges. For many high school and returning students, going to a community college can serve as a buffer before launching into the hyper-competitive world of university admissions, but making that transition is not easy. According to a 2013 report, 81% of first year students want to transfer to a four-year college or university, but after six years, only 12% were successful. Today, the percentage has risen only slightly to 15%. 

This post will give you a brief overview of what these schools are doing today to meet the needs of rapidly changing demographics and job markets. Understanding their focus may offer some insight into how directing funding to two-year colleges offers a unique opportunity to bolster resources in an underfunded area of education.

Community colleges are evolving just as quickly as the needs of their students. For starters, they have altered their traditional business model of offering stand-alone associates degrees to offering baccalaureate degrees. Schools in locations that are not served by a nearby four-year college are the ones most likely to do so and the BAs typically serve students who want to become teachers and either cannot afford or cannot travel (or both) to a major college or university. Though such a big change is not without its critics, adapting to address teacher shortages in rural or otherwise underserved areas has become a crucial service of many community colleges. 

They have also formalized their relationships with four-year colleges and universities by become official “feeder” schools to partnering institutions. Students who may not have had the initial qualifications to attend or who could not initially afford tuition, can start at the partnering community college and easily transfer credits after two-years while saving on fees. 

While the concept of a transfer student is one we’re all familiar with, another trend at community colleges is the reverse transfer students. Some of these “transfers-in” are students who are returning to community college to improve specific job skills after attending four-year colleges. Others either could not sustain tuition payments or did not perform well academically at the four-year college and end up returning to community college to build up enough credits to re-enroll at the four-year school or even get the associates degree they missed out on by transferring out. 

 Community colleges also make important contributions to higher-education’s mandate to serve the national interest. They have the most diverse student body not just in terms of race (they collectively serve more black and Latino students than their four-year counterparts), but in other demographic segments such as Baby Boomers and Iraq War veterans. Whether students come to retool for a new career or to reintegrate into society as a civilian, community colleges are developing comprehensive programs designed to help an increasingly diverse student body acquire the education and skills it needs to return to the workforce.

 For a donor interested in higher education access and creating a wider path to the middle class, these trends are relevant and worthy of consideration. Community colleges tend to serve students with the greatest needs yet receive the least amount of support. Philanthropy is not the only sector to realize the disparity. So far, 19 states have free or debt-free tuition to community colleges and see their success as critical to building a workforce and citizenry ready for a new economy. Your local community college is an important piece of the higher education puzzle that deserves attention. 

For more information on the role of community colleges in the higher-education landscape, read The Chronicle of Higher Education’s “Why Community Colleges are Good for You” and The Century Foundation’s importantresearchon how community colleges help create pathways to an aspiring middle class.

Giving Profile: Disaster Philanthropy

Here in the Pacific Northwest, we are known for our rainy winters and springs. The persistent dampness and temperate climate are what give Washington State, where I live, its name, The Evergreen State. But in the past two years, I’ve witnessed the emergence of a new time of year, wildfire season. 

 Epic drought for the past several years has left the entire west coast parched and on the verge of ignition. Of all the horrible fires last summer, nothing was as devasting to human life as the Camp Fire which killed at least 85 people. The 2018 wildfire season was the deadliest on record. 

 Though wildfires are prominent in the West, the summer months are also known for hurricanes in the South and tornadoes in the Midwest. But not all disasters are due to weather. They also include mass shootings, the refugee crisis and other man-made atrocities. All are horrible to witness and tug at our heartstrings. Calls for action are urgent and our instinct is to lend a hand. We want to help victims. We want to support first responders. So, we give.

 In May, I attended the Advisors in Philanthropy Conference in Washington, D.C. where I went to a plenary session on giving in the wake of disasters, and it was an eye-opening experience. Robert Ottenhoff, CEO of Center for Disaster Philanthropy (CDP), gave an impassioned presentation to the advisors in the audience about what is truly helpful in natural and man-made disasters. He told of how emergency responders classify emergencies as Sudden Onset (Hurricane Harvey, Pulse Shooting), Slow Onset (Ethiopian famine), or Complex (Syrian refugee or Southern border crisis), and how the nature of response is different for each. Developing intentionality around funding disasters is getting greater attention after a seemingly incessant spate of epic events due to the climate crisis and gun violence.

He spoke about how funders are (re)considering their role in preparation for and in response to disasters, what we have learned from some of the recent, large events, and finally, how we can best respond in ways that are proven to be beneficial, both in the short- and long-term. This month’s post will share useful tips and approaches for donors about how best to incorporate disaster giving in their charitable portfolio.

 He began with the numbers of how we currently give. In the US, disaster giving is quick off the mark and reactive:

• 1-4 weeks following a disaster: Over a third of private giving is complete 

• 1-2 months following a disaster: Two-thirds of private giving is complete 

• After 6 months: All giving stops, yet full recovery often takes YEARS.

 About a third of all US households gave to disasters giving an average of $81, but the vast majority of that giving is in the immediate days of the tragedy. What we don’t often hear in the media is the still dire needs of a community once the tragedy has moved out of the news cycle. Consider this from CDP:

 When disaster drives people from their community, it can result in: 

• Increased taxes

• Loss of school revenue and teachers

• Greater public debt shared by fewer taxpayers

• Increased utility costs

• Homelessness

• Loss of workforce and business development opportunities 

And for those who stay, they often face:

• Mental health issues (e.g., loss of hope, increased despair, PTSD, etc.)

• Increased suicides, divorce, drug and alcohol abuse, early death 

• Lack of community trust 

 As these events become more regular, it’s crucial that individual donors, and especially corporations and foundations, be more thoughtful and strategic in their giving. But the challenge in doing so is obvious. When disaster hits, the flurry of urgent appeals on social and traditional media can be overwhelming, leading many to donating the wrong things to the wrong non-profits at the wrong time. One striking anecdote that Mr. Ottenhoff shared was the number of coats and jackets sent to Hurricane Harvey victims (in Texas), which not only could they not use, but they also had to spend precious resources finding a way to store, then donating them elsewhere. 

 The CDP is a specialist in the area and they play an important role in helping funders go from being reactive to strategic. He concluded by reminding us that all funders are disaster funders and that catastrophic events tend to fall outside of normal grantmaking guidelines for the average donor. With that said, the aftermath of emergencies extends far and wide affecting housing, vulnerable populations (low income, seniors, people of color), education, health, and more. It is crucial that all donors consider the full arc of disasters and the full scope of their needs for an effective recovery.

 While it is common to think of them as discrete events with fixed beginnings and ends, emergency first responders generally think of disasters in "lifecycles" that happen before, during, and after a devastating event: mitigation, preparedness, response, and recovery. Understanding what is needed in each phase can help the donor decide where they can provide the greatest need by the strategic deployment of their time and treasure. 

 In summary, for disaster philanthropy to be effective, follow these rules: Give cash. Fund local. Fund long-term. Fund medium-to long-term recovery efforts. Learn from others. 

Additional Resources:

Basic Tips for Disaster Giving, Center for Disaster Philanthropy

Tips for Giving in Times of Crisis, Charity Navigator

The Disaster Recovery Network, Global Giving

"What Do You Do?" 5 Things to Know About Philanthropic Advisors

When I meet people for the first time and they ask what I do, I get a thrill in the telling. They often have their own vague ideas, but after hearing my answer, I invariably hear “Wow, you have an amazing job!” Oh yeah. I absolutely do.

This blog about what I do as a philanthropic advisor and why working with someone like me can be, dare I say, not only incredibly rewarding, but also fun. This post is written for major donors, of course, but also for financial advisors, trust and estate attorneys, tax specialists, and any professional working with charitably-minded, high-net-worth individuals who may be “stuck” when it comes to their giving.

Before I dive headlong into the details of the work, I will first answer a basic question: “What exactly IS a philanthropic advisor?” Well, we are those professional advisors you hire to help guide the charitable aspects of your life. We are thought partners to individuals, couples, families and estates who want to become more intentional and impact-focused with their giving. We advise on appropriate giving vehicles, help you discover both empirically and emotionally what you care most deeply about, and help you understand your impact. But that’s just the tip of iceberg. We do so much more.

Some philanthropic advisors specialize in issue areas (international giving, women and girls, etc.) or specific types of philanthropy (effective altruism, social justice, collective giving). Others specialize in different types of clientele (women, international families, the mega-wealthy, novices, companies small and large, etc.). Regardless, all are dedicated to making giving more meaningful and productive for the donor as well as the beneficiary.

And now, here are five things to know about what I (and Philanthropic Advisors in general) do:

1.   We know the field. The world of philanthropy is incredibly diverse and complex. Philanthropic Advisors are knowledgeable about giving vehicles, strategies, and opportunities that can make giving to charity joyful and meaningful. We are here to answer questions: Should you establish a Donor Advised Fund, a foundation, or both? Can you donate land, art, or real estate to fund your giving? To whom shall your gift be given, when, and under what terms? We are skilled at working with financial advisors and attorneys to help you sort out the best options available so that you make the wisest possible decision to meet your charitable goals.

2.   We know the issues. Philanthropic Advisors stay on top of the issues to help advise their clients on best practices in the field of giving. We are polymaths. We are able to take deep dives with you into your issue area, help you discern the best organizations with whom to engage and how, and even make strategic introductions to help you develop your own learning community. And when we don’t have the answer, we have deep and wide connections to professionals who do. 

3.   We help you get at the “Why”. When you’re ready to get more intentional with your giving, and maybe increase the size of your gifts, it’s no longer enough to just “write a check”, giving on the fly. At some point, it becomes necessary to become more strategic in affecting positive change. We ask deep and meaningful questions to help you discern the “why” of your giving. At Phila Engaged Giving, after an in-depth Discovery Period, you will receive a comprehensive Wealth and Giving Planthat outlines your mission, vision and values; a giving budget, and the specific methods you will employ to achieve your goals.

4.   We facilitate the tough conversations. Are your family members aware of their potential inheritance, or how to manage it? Is your multi-generational family all on the same page about who you’re giving to and why? For some, these can be touchy topics, but Philanthropic Advisors are skilled at facilitating these conversations with grace and knowledge. We can help your family grow closer by planning and reflecting on values and interests that lead to intentional decisions as philanthropists. 

5.   We help you stay focused. We all have busy lives juggling work, family, school, and so much more. We know you care about the non-profits you are committed to and want to do more with your giving, but let’s face it. That noble goal is pretty easily lost in the hustle that is our daily grind. Philanthropic Advisors are here to remind you of important deadlines, opportunities, optimal times to give. We keep our eye on the ball so you don’t have to.

You likely have already hired lawyers, an accountant, and financial advisors (if you haven’t, call me) and those relationships are fairly well-understood. However, as philanthropy is getting ever more attention with the looming great wealth transfer, philanthropic advisors, like Phila Engaged Giving, are becoming necessary to understand the connection between money and meaning. If you are charitably-minded and are able to donate a sizeable amount each year ($100,000 or more), you should consider adding a strategic Philanthropic Advisor to your team. Doing so will help you reach the next level of charitable giving and expose you to a new world of meaningful opportunities. 

A Life-Changing Journey of Faith and Learning

by Selene Poulsen

During my time at the University of Washington, I wanted to expand my knowledge in new areas. Looking through the internships on my university’s job board, I saw the Phila Engaged Giving philanthropy internship posting and felt compelled to apply. I was concerned that being new to the philanthropy industry would limit my ability to contribute. Nevertheless, I soon found that my business skills and passion for community engagement complimented the job’s tasks. I felt privileged to have the opportunity and began absorbing as much as I could about consulting and philanthropy.

After a few weeks of working closely with my mentor, Stephanie Ellis-Smith, I saw numerous similarities between philanthropy and my life experiences. I reflected on my work in communities, connections with non-profit organizations, jobs I’ve had in the past, and my world travels. One part of my role with Phila has been to connect current events with philanthropy for content in our e-newsletter, Insights into the World of Philanthropy.  With Ramadan approaching I was inspired to write about the correlations between the holiday and philanthropy.

In 2016, I took part in a study abroad program in Morocco. We traveled to six cities, participated in a three-day trek through the High Atlas Mountains, and experienced a hands-on approach in researching the impact of global warming, all while engaging with an Islamic country.

As the trip unfolded, I began to realize how westernized I was in my understanding of Islamic culture. Prior to this trip my knowledge on the subject was limited to what I saw from the U.S. news. I knew that women covered their hair and that their Bible was called the Quran. It was a shameful realization that I did not know more than these superficial bits of information.

Upon my arrival, I saw that people indeed did dress modestly. Not all women had their hair covered, however, as I originally assumed. In fact, many women were wearing shorts and a tank top. I quickly learned that Morocco is considered a liberal Islamic country compared to others. This, of course, varied as we traveled to more rural spaces. Like here in my home country, the rural places tended to have more conservative views, while the cities were the opposite.

I became immersed in Moroccan culture through its food, language, and history. We were fortunate to study Islam at the Al Akhawayn University in Ifrane. There we learned the entire history of Islam, including its origins, and how the culture has evolved into its modern-day components. When I reflect on my exploration of Ramadan, I now make meaningful connections to the philanthropy sector where I currently work.

Ramadan is observed by Muslims all over the world and was established in the 7th century when the Quran was revealed to Muhammad. It is based on a lunar calendar and therefore, does not start on the same day each year. This year it will begin at sundown on May 5th and will conclude on June 4th.

During this religious month, Muslims are expected to fast from sunup to sundown. When I learned about these dietary restrictions, I remember one student asking our guide, “but what if you’re pregnant?”  I assume that most of us on the trip had never really practiced fasting other than the few Catholics who do mild fasting during Lent. I also was thinking “no food ALL day?” Our guide handled our ignorance with grace and answered our questions. He said, “pregnant women, young children, sick, or elderly are not expected to fast during Ramadan.” I was relieved to know that there were meaningful exceptions and then began to ponder, “why fasting?” It was at this point that I learned about the beautiful meaning of Ramadan.

During the month of Ramadan, not only do Muslims fast, but they are expected to stop all behavior that may be considered immoral. This may include smoking, drinking, and sexual activity--depending on how strictly you practice. Additionally, they are supposed to avoid having impure thoughts or using unclean words. These actions are meant to cleanse the soul of impurities, as well as empathize with the poor and hungry.

Although philanthropy can be found in many religions, what is interesting about Islam is that Zakat (alms giving) is the third pillar of the five that the religion is founded on. The meaning of giving is a crucial foundation of Islam. To practice Zakat means that if you make enough, an annual payment of 2.5 percent of your wealth will be given to the poor. Zakat is an important religious component of Ramadan. If one cannot fast during Ramadan, they are expected to practice Zakat and give food to the poor regularly. In fact, during Ramadan, every Muslim is expected to give to the poor more frequently.

Another aspect of Ramadan is self-reflection. Muslims are expected to practice self-reflection more frequently during Ramadan, including visiting mosques more regularly for prayer. During the holiday, they practice special prayers and some Muslims take this time to read the Quran in its entirety.  

After learning about this, I began to think about when I take the time to do this in-depth reflection and self-care. I began to understand the importance of Ramadan in which people are encouraged to get outside of themselves and their busy lives. The truth of the matter is that I really don’t do this often. I volunteer regularly. I fight for equality. I maintain to do what I believe is right daily. But on a spiritual level, I have not done anything as meaningful as Ramadan’s annual teachings.  

It is for all these reasons that I encourage you to please take some time during the month of May to learn more about Islam, Ramadan, and philanthropy. Discover how these three components are intertwined. There is always a way to connect by exploring our differences. You may be pleasantly surprised with what you find out and how the lessons can apply to your daily life. I know I was.

Faith and Charity

Photo by Billy Pasco

Depending on the part of the country in which you live, it may not be obvious how central religious giving is to the philanthropic sector in the United States. Donors in parts of the country that are more religious, tend to give more, give more widely, and volunteer more. For example, Southern donors give roughly 5.2 percent of their discretionary income to charity—religious and secular—compared with donors in the Northeast, who give 4.0 percent. Churches, temples, mosques, and their non-profit supporting agencies deploy billions annually to aid people all around the world. 

The value of generosity is a concept that has deep roots in many faiths. However, given that next month hosts the high holidays of the three Abrahamic faiths (Ramadan in Islam, Passover in Judaism, and Easter in Christianity), this blog post explores the role of giving in each of them.

For Muslims, giving is one of theFive Pillars of Islam. “Zakat” (meaning to grow in purity and is focused on charity or alms-giving) is an annual payment of 2.5 percent of one’s assets, considered by many as the minimum obligation of their religious giving. A majority of Muslims worldwide make their annual zakat payments as a central faith practice.

Above and beyond the required zakat, many Muslims make additional gifts (referred to broadly as “sadaqa”). Interestingly, the word shares the same root as the Jewish “tzedakah,” meaning justice. Muslim giving also focuses primarily on the poor. Of course, charitable giving is not just for the rich. For those with no money to give, the Prophet Muhammad considered even the simple act of smiling to be charity, a gift to another.

In Judaism, the Hebrew Scriptures refer to “tzedakah,” literally meaning justice. Tzedakah is considered a commandment and a moral obligation that all Jews should follow. The commitment to justice places a priority on their giving to help the poor. Beyond giving just time and money, rabbis even spoke of “gemilut chasadim,” literally meaning loving-kindness, or focusing on right relationship with one another as the prerogative of religious giving. 

Even more broadly, an ancient Jewish phrase, “tikkun olam,” meaning to repair or heal the world, has been adopted by many religious and secular causes. Barack Obama, Bill Clinton, Hillary Clinton, and George W. Bush all spoke to a vision of “tikkun olam” in their speeches. 

Similarly, Christianity has considered giving a key religious practice. Many Christians still look to the Hebrew Bible and the tithe, which involves giving one-tenth of an individual’s income, as God’s commandment. In the New Testament, Jesus not only spoke of giving a tithe but challenged followers to give far beyond it. 

For instance, in the Gospel of Matthew Jesus challenged the rich, young ruler to sell all his possessions. Pursuing those values, a long monastic tradition has seen men and women taking vows of poverty to give themselves to the work of their faith. Today, while the tithe might not be practiced by a majority of Christians, most understand the practice of giving as a central part of their faith, especially in December as a mark to celebrate the birth of Jesus.

When I think of my own background, I reflexively thought that our Catholic family didn’t have much connection to philanthropy. But upon reflection, I realize that we embodied the consistency, generosity, and intentionality that I counsel in my clients. I remember so clearly that moment every Sunday at Mass when the ushers would walk up and down the aisles with a basket at the end of a long pole that reached in front of every sitting congregant, quietly imploring them to make a deposit. Every week, my father’s jacket pocket contained an envelope, pre-filled out by the Parish, with a contribution inside that he dutifully added to the collection. My sister and I, anticipating this moment in the Mass, pestered our parents for loose change, or even sometimes a bill, to drop in when the basket passed in front of us. In that moment just after making my contribution, I felt grown-up, a part of something, and proud to be joining others in giving. 

Those childhood feelings still inform how I give today, and I am not alone. Among Americans who give to any cause, 55 percent claim religious values as an important motivator for giving. The Discovery Process at Phila probes deeply into your values and how they inform your giving. And in this work, religion is not ignored. Regardless of the basis of your faith, most who grew up in a religious environment can speak to how the rituals, rules, and expectations have left their mark—for good or for ill. This exploration helps our clients reflect with intention and authenticity on what exactly informs the “why” of their giving. 

Instead of simply giving as part of a routine, it is worthwhile to explore the role of faith and values in your philanthropy. Doing so can provide insight into, among other things, the type of organizations you might support, your expectations around impact, and how or if you decide to become more involved with their work. And it is worth remembering too that including your children in your giving ritual, no matter how simple, lays good seeds for a robust philanthropic future.

Having a greater understanding for and appreciation of the charitable mandate in so many faiths, we might see that we have more in common with each other than we might realize. 

This post references statistics from The Chronicle of Philanthropy and uses descriptions of religions giving practices from The Conversation under the Creative Commons license.

Giving by High-Profile Individuals

Author and philanthropist, JK Rowling

Ellen DeGeneres, Brad Pitt, LeBron James, Mark Ruffalo, Oprah Winfrey. These entertainment industry superstars not only lend their names to charitable causes around the globe, they are also among the growing number of celebrities collectively giving over $1 billion dollars to causes ranging from the environment, to education, race and gender issues. Whether it’s J.K. Rowling giving away 16% of her net worth in just one year—with $160 million in donations to various charities—or Colin Kaepernick’s million-dollar pledge to organizations working in oppressed communities, celebrities are increasingly using their powerful voices to affect change.

Guiding those on the global stage through the charitable giving process requires a different approach than working with non-celebrity clients. With any client, Phila moves only as fast as the speed of trust. Trust and integrity are the keys to building the rapport necessary to begin our process. We begin by asking why are you interested in philanthropy and why now? Individuals with a public persona need to spend considerably more time than private individuals asking themselves the big questions around their giving because their success stems directly from the authenticity they display. Philanthropic choices lay bare your personal values to the world. You need more than just money and good intentions; you need to have a reason for giving and as well as a plan.

So what can you expect working with Phila?

Focus. Attention to and focus on not just the client, but their family to ascertain what is most important to them and why is central to our interaction. Our advisors acknowledge the full spectrum of individual and family values, needs, fears, joys, and sorrows—the human and spiritual complexities that come with great wealth and fame. Working with Phila assumes your willingness to engage in self-examination, to ask yourself probing and difficult questions, and to commit to answering them honestly. Questions like: “How did I get here? Who had to make sacrifices to make my success possible?”

Alignment. With all of our clients, the foundational work of planning for philanthropy does not involve reading balance sheets or writing a check. The very first indicator that a charity is a contender for your gift is if their mission aligns with your values. Thus, we spend a significant amount of time exploring who you are as a person. Being in alignment with a cause you publicly support makes the mission match all the sweeter and feels good not just to you the donor, but to the organization you are supporting as well. 

Authenticity. If your personal beliefs and experience are in alignment with a cause, the public will see your advocacy as authentic. Our firm is not about publicity. While it’s true that lending a well-known name to an issue can have positive outcomes for both parties, our driving force is forging authentic relationships based on altruism and shared values. Having a true, deep connection to an issue makes it more likely that your experience as a philanthropist will be rewarding.

Diligence. We are diligent in recommending not only which organizations to work with and how best to support them, but also the infrastructure needed to support your giving. Should you have a foundation or donor advised fund? And if it’s a foundation, should it be operating or non-operating? Many do not realize how complex giving vehicles can be; especially when you consider tax, estate planning, governance, evaluation, and the sustainability of your enterprise. Phila will help you make the right decisions based on your unique needs. 

Discretion. For many, giving is not about recognition it’s about the work. Many prefer to work silently in the background, and out of the spotlight. (Prince’s philanthropy comes to mind.) Based on a client’s preferences, we advise on giving anonymously, the best charitable vehicles to use based on how public you want your giving to be, as well as how to use one’s platform for advocacy. Regardless of your choice, Phila does not publicize who any of our individual clients are, as we believe in creating a private, non-judgmental space to learn and develop your charitable profile. 

Competency. We are experienced in working with individuals, families, and institutions to help our clients get the most out of their giving. Beyond the core competencies required in the social sector (such as, due diligence, governance, compliance, best practices), our greatest skills are the “softer” ones—clear communication, the ability to listen and to show empathy, and a responsiveness to the multiple demands on clients who lead busy, complex lives. 

Collaboration. No one person can do it all. Working with Phila means you gain access to a team of individuals who can address the complicated needs of every client. Whether it’s connecting you to wealth managers, attorneys, personal coaches, or PR agencies—or  working with your established team of professional advisors—we at Phila do not work in a vacuum. We are collaborative by nature and recognize that philanthropy is an expression of the whole person with a variety of needs. 

There are many ways the wealthy and famous can get involved in philanthropy. For those individuals who are looking to connect in a profound and meaningful way to issues they care about, who want to be a part of organizations doing the important work on the ground, and who want to use their talents as well as their treasure, a deep engagement with philanthropy can be especially rewarding. But before you begin in earnest, be sure to take the time to establish a clear understanding of who you are as a person so that your giving will reflect the values that shape your life. Doing so will guide you toward the people out there who are on the front lines of changing the world and need your support.  

A Trio of Books on Philanthropy to Get Your Mind Churning

Looking for thought-proving reading on the current state of philanthropy? Well, there has a been a flood of new books that have, in the words of Jeff Bezos in an entirely different context, “turned over the log” of philanthropy so that we can examine what has been hiding in the dark.

Three important books were published in 2018 that implore us to think critically about the role of philanthropy and wealth in our society. Whether you agree with them or not, you will definitely leave with an opinion and be better informed.

 The first is Winners Take All: The Elite Charade of Changing the Worldby Anand Giridharadas. The journalist dismantles the elites of "big philanthropy" and their institutions that maintain the status quo to their extreme advantage. Their giving is palliative rather reparative; in that it refuses to address the root causes of the suffering they’re trying to alleviate because to do so would threaten their position and lifestyle. He speaks with all of the zeal of the converted as an ex-member of the club of thought leaders and pundits who reinforce the notion to the world’s mega-wealthy that their good works is enough, rather than endure the true sacrifice necessary to enforce systemic change. 

 The second is Just Giving: How Philanthropy is Failing Democracy, by Robert Reich (not the former Secretary of Labor of the same name). The philosopher's argument is similar to Giridharadas' in positing that the immense power the very rich hold in philanthropy is inherently undemocratic and erodes the underpinnings of our aspirations toward justice. He goes further to argue that big philanthropy has a big problem with ethics and unfair uses of power by its being unaccountable, nearly perpetual, and hugely tax-advantaged. Reich also suggests ways to use legislation to bring more equity into the philanthropic sector. 

The final book is Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balanceby Edgar Villanueva. If you read his book last, you might think it will be a balm to the previous two books’ searing critiques. While his tone is gentler, he is no less forceful in his arguments on the extreme inequality in philanthropy and society. What is unique here is that Villanueva assesses our current state of affairs through the lens of colonialism. His thoughtful and unique arguments explain his view that finance and philanthropy have not strayed far from its imperialist beginnings. However, unlike Giridharadas and Reich, Villanueva offers Native American-rooted wisdom to help us rebalance and heal from these centuries-old wounds.

 These three authors will no doubt be remembered as the ones who shone a light on philanthropy and encouraged us to be better.

Case Study: Executor to multi million dollar estate partners with Phila Engaged Giving to create a lasting legacy for beloved friends

Written by Elizabeth Kain

In 2014, Claudi Wilson found herself executor to the estate of beloved friends she had known for more than forty years. Martin (Marty) and Jeanette (Jan) Manhoff had entrusted Claudi with their legacy but had provided little guidance on how to move forward after their passing. The will stated only that Claudi should consider any nonprofit of which she thought they would approve. While she had great partners in her lawyer and investment advisor – not to mention friends of Jan and Marty - she yearned for expertise not only in how to create a lasting legacy for her friends, but also how best to distribute their beloved possessions.

Claudi with Jan

“I felt this huge sense of responsibility. They were people I loved very much, and I wanted to create a lasting legacy. It was incredibly important to me.”        – Claudi Wilson

Background

Marty and Jan met as art majors at the University of Washington. Upon graduation, they immediately set out to support the allied effort in World War II. Following the war, they wed and Marty accepted a position to serve as military attaché in the Soviet Union during Stalin’s regime.  After ten years in Europe, they returned home to Seattle and opened Bottega, a contemporary home-furnishings and housewares store. It was here where Claudi first met the Manhoffs.  She felt an instant connection with the couple; Marty’s kindness made an immediate and lasting impression, and she and Jan shared a passion for art. Claudi worked for them for three years and during this time, as they provided more and more opportunities for her to explore her own creative passions, she was inspired to pursue a career as a designer, eventually landing the position of Creative Director for one of the major television networks.  

Over the years, Claudi kept in touch with the Manhoffs, attending Jan’s art shows and catching up with calls, but it was only after her mother’s passing that she reconnected on a deeper level and was once again welcomed into the Manhoff’s life as their surrogate daughter. She learned that Marty had Parkinson’s disease and looked after both him and Jan as his illness progressed. Finally, just before Marty passed in 2008, she promised him she would take care of Jan once he was gone. Claudi looked after her for the next six years, until Jan died in 2014.

Claudi felt an enormous sense of responsibility to the Manhoffs and knew she did not have the experience to manage their estate on her own. While she was committed to creating a legacy that would serve well the memory of her friends, she was overwhelmed at the prospect of determining what this might look like and then seeing it through. Marty and Jan were devoted to art, but they also treasured time at their cabin in the San Juan Islands. Finding a way to support these diverse passions was daunting. Her trusted investment advisor and a lawyer could not advise on some of the philanthropic complexities of the Manhoff trust. As Claudi shared her concerns with friends, one put her in touch with Stephanie Ellis-Smith at Phīla Engaged Giving.

Why Phīla?

Phīla Engaged Giving works with individuals, families, estates, foundations and businesses that know they have been financially rewarded and are interested in sharing those rewards with the community. When Stephanie founded the company, her goal was to help her clients understand the issues that move them, learn from experts on the ground who are doing the work and make high-impact investments in groups that best align with their interests. She values candid and personal explorations into people’s values and beliefs, life experiences and aspirational goals.

“Of course, I could do the research, but the questions Stephanie asked and the expertise she offered made a tremendous impact on my philanthropic decisions. I feel so happy with my choices. They were a perfect reflection of the goals I outlined at our first meeting.” – Claudi Wilson

When she met Stephanie for the first time, Claudi was impressed. She immediately had the sense that Stephanie was asking the right questions, and she felt comfortable sharing her hopes and aspirations for a philanthropic advisor as well as what she wanted to accomplish on behalf of Jan and Marty.  As Claudi explained what issues were most important to them, Stephanie provided her take on the two areas of interest – the arts and the San Juan Islands archipelago north of Seattle. Later, she developed a list of potential organizations whose missions matched the Manhoff’s passion and goals, as described by Claudi.

As the relationship between Stephanie and Claudi deepened, Claudi confided other challenges she was facing as she sold or auctioned Manhoff possessions to increase their financial impact. Voracious readers, the Manhoffs had left a considerable collection of books; unfortunately, wholesale book sellers wanted to cherry pick the best volumes, leaving Claudi with hundreds of volumes for which she would have to find new homes. Stephanie took on this and other challenges with zeal. Not only did she find libraries that would take each and every tome, to Claudi’s huge relief, she arranged for them to picked up and transported to their new locations. She also successfully placed Jan’s art in strategic locations or arranged for it to be auctioned for the benefit of local artists.

As Claudi worked with Phīla to narrow the choices for her financial gifts, Stephanie arranged for Claudi to meet the staff at the organizations who were likely to be the best fit. This semi-formal interview process allowed Claudi to get to know the people doing the work, understand how they evaluate their progress, and then to determine her level of involvement going forward. Stephanie facilitated proposals to Claudi on how the Manhoff’s donations would be used and tracked. Most importantly, she laid the groundwork for a strong and lasting relationship between Claudi and the ultimate recipients of the Manhoff Estate.

The Outcome

“I knew Stephanie had understood the Manhoffs when I ran into a couple of Jan’s friends and they mentioned that the organizations Stephanie had recommended would be a good fit with Jan and Marty’s values.” – Claudi Wilson

At the end of the months-long process, Claudi selected two organizations to be recipients of the Manhoff estate: one focused on supporting local artists and another dedicated to conserving land in the San Juan Islands. Both organizations had provided a clear roadmap for how the gift would be used, a timeline for implementation and expected outcomes. A year later, Claudi now considers the staff friends and feels comfortable calling whenever she has questions. Claudi remains involved in both organizations’ activities to the extent she wants to be and feels she has a far greater knowledge of philanthropy than when she started. Most importantly, she feels confident about the legacy she has created on behalf of the Manhoffs.

My Take on Your Philanthropic Plan: Five Things to Consider

I talk with people every day who are thinking about beginning or expanding their philanthropic giving. This includes both individuals who have a few extra dollars they would like to contribute to those who are looking to make a significant impact with their giving. Whether you have $5 or $5 million, many of the steps toward building a meaningful philanthropic plan are the same. What’s my take on how best to get started or infuse your current philanthropy with renewed vigor?  Don’t wait. Get started on your plan for giving today. After all, your talent, time and treasure are needed by organizations all over the world NOW.

So where and how should you begin? Here are five things I recommend you consider as you embark on creating your philanthropic legacy:

1. Get to know new organizations. Many people devote endless hours researching which schools are right for their children, the perfect car to meet their needs or the right neighborhood to buy a home. As with these important decisions, I recommend you spend time and energy upfront learning about the organizations that best reflect your interests and passions. Whether you are interested in supporting youth in need, saving endangered animals, or improving the environment, philanthropy is more than giving money to any one group; it is about pursuing and achieving goals that are most important to you.

2. Take risks. The only way to grow is to diverge from your usual path. In the process, you will make mistakes, but it is all part of the learning process and will you make you better, more educated donor in the long run. As Case Foundation CEO Jean Case said, “To find solutions — and we desperately need new solutions to old problems — we’re going to have to take risks.”[1]  This thinking contributed to the Foundation’s Be Fearless campaign, designed to encourage individuals and foundations to take more risks and be bolder with their giving. An interesting paradox in the philanthropic sector is that the risk-taking nature that defines the entrepreneurial spirit and generates the wealth somehow seems to dissipate as the entrepreneur becomes a philanthropist. The same spirit of ingenuity that defines business can do well in philanthropy, but we tend to become quite conservative instead. That needs to change.

3. Find a community of givers. This includes everything from talking to friends and colleagues or finding a more structured giving community, preferably at your same stage of learning, to broaden your knowledge of your community as well as giving strategies and opportunities. Finding a group of like-minded people to help is especially important for those who are new to philanthropy and having to tackle challenging questions and complexities specific to their personal situations. A philanthropic advisor can help you connect with peers to make your giving more fun and rewarding.

4. Go deeper into the giving area that resonates most with you. Learn from experts in the field and become an informed donor. This will not only provide you with an understanding of what is happening in your particular area of interest but also why and how issues persist. For example, while animal lovers may be interested in supporting organizations that fight poaching elephants in Africa, they should also understand what lies behind this issue. Why does this problem persist despite millions of dollars spent trying to curb it and laws in place to punish those involved? Are there organizations they can support that address the underlying issues creating the challenge in the first place?

5. Stay engaged.  Once you’ve pledged your financial support, look for opportunities to volunteer as a community member or on a board. Learn the intricacies of the non-profit sector and commit to being an active participant in the world around you. Why is this important? For one, learning about the issues that move you most from “the trenches” is crucial to understanding. The best way to assess the impact of your giving is to see it put to use first hand. And perhaps most importantly, in this age of online engagement, volunteering allows you to join a community and build strong relationships with likeminded people.  According to Psychology Today, those who volunteer will also live longer and lead happier and healthier lives.[2] The time to act is now; join the more than sixty million Americans who volunteer each year.[3]   

Embarking on any philanthropic journey requires a clear understanding of the motivations behind it. Many people already have some idea of what passions they possess, and they often change over time. At Phila Giving, we can help you explore the motivations behind your giving, what your charitable goals are, and how you want to make an impact. That said, I encourage you to starting planning today – with or without us - to make the world a better place tomorrow. Have questions or comments about my take on this issue? Contact me at stephanie@philagiving.com.

[1] Susan Wampler, “Case Foundation CEO encourages Risk Taking in Philanthropy,” May 19, 2015, https://news.usc.edu/81796/case-foundation-ceo-encourages-risk-taking-in-philanthropy/, (accessed February 15, 2018).

[2] Dawn C. Carr, “5 Reasons Why You Should Volunteer,” March 12, 2014, https://www.psychologytoday.com/blog/the-third-age/201403/5-reasons-why-you-should-volunteer, (accessed February 14, 2018).

[3] Bureau of Labor Affairs, “Volunteering in the United States, 2015,” February 26, 2016, https://www.bls.gov/news.release/volun.nr0.htm, (accessed February 14, 2018)

Tax Cuts, Jobs Act and Philanthropy: My Take

Welcome to 2018!

As I reflect on the events of the last twelve months, I find myself focused on the Tax Cuts and Jobs Act of 2017, passed just before the New Year dawned, and its impact on philanthropy. The bill, which provides the most comprehensive revision of the tax code in decades, left many scrambling to understand the newly wrought changes and their implications.

Giving is a deeply personal act. Most donors do not cite tax implications as the primary motivation of their philanthropic activities.  Instead, key drivers of philanthropy tend to be rooted in personal values, an organization’s mission, and a desire for social change. That said, we cannot ignore the role the IRS plays in how we translate our assets into an expression of generosity. Phila Engaged Giving supports legislation that fosters and encourages philanthropy in making meaningful financial gifts to organizations that best align with their interests. We will track and monitor all legislation impacting philanthropy and continue to report our findings here.  

As the weeks and months unfold, we will gain a clearer picture of how the new bill will impact the philanthropic sector. In the meantime, there are a few certainties. Below is a bird’s-eye view of tax code changes and how they might affect philanthropic giving and you as a donor.

The Charitable Deduction

Despite fears leading up to the passage of this bill, the philanthropic community was relieved to find that the Charitable Deduction remained intact under the new tax code. As before, you may deduct charitable contributions of money or property to qualified organizations if you itemize your deductions. For some making large donations, the new code may even provide further benefit; for example, the maximum amount for charitable gifts deducted from a donor’s gross income increased from 50% to 60%.

The Standard Deduction

The Standard deduction taxpayers can take without itemizing each of their charitable gifts during the year was doubled from $6,000 to $12,000 for individual filers and from $12,000 to $24,000 for couples. The expansions will likely increase the number of taxpayers choosing the standard deduction rather than itemizing those gifts. Charities fear that the modification has the potential to disincentivize charitable giving, especially for those giving between $1,000 and $10,000 a year, because people who no longer choose to itemize their deductions may also decide not to donate to nonprofits. The effect of the modification of the Standard Deduction is the new tax code’s greatest unknown in terms of impact on charitable giving.

The Estate Tax

Like the Standard Deduction, the Estate Tax was doubled from $11 to approximately $22 million for couples, which shields all but the very wealthiest from the tax. Previously, the estate tax served as an incentive to the wealthy to donate parts of their estates to avoid a penalty. While its absence has the potential to impact larger charitable gifts, this is far from certain, as the overall tax environment with respect to philanthropy remains positive. We will have a clearer picture of the positive or negative impact on charitable giving in the months to come.

Donations of Appreciated Assets

The rules that allow people to donate appreciated securities and other assets to charities to avoid capital gains taxes did not change.

Donations from Individual Retirement Accounts (IRAs)

The rules on charitable donations made from IRAs remained intact; however, donors may revisit these kinds of gifts, which now appear more attractive relative to other options. People over seventy and a half must still make minimum distributions from their IRAs and are taxed on the amount they use; however, they are able to donate up to $100,000 to charity tax free while still counting for the minimum distribution. That begins to sound like a good decision when compared to leaving an IRA in your estate at death.

Donor Advised Funds (DAF)

There are no changes in the new tax code that impact Donor Advised funds. Donors who experience a liquidity event or otherwise have a high taxable income in one year, however, can as before contribute multiple years’ philanthropic giving into their DAF. This enables them to receive a tax deduction for the entire sum at one time while still benefiting from the standard deduction in years following.

Our deep desire to share with others our good fortune may be simple, but – sadly - can get caught in a web of rules and regulations. I hope this brief summary of some of the changes and implications of the Tax Cuts and Jobs Act of 2017 on philanthropy will spur new thoughts, insights, and conversations about your plan for giving in 2018. While its impact is still unfolding, my take is that the net result of the modifications will be neutral for most donors.

As always, I suggest that before you make a final decision on your philanthropic program, you consult with your planning team, including your financial, tax, and philanthropic advisors; estate planning attorney; and insurance brokers, to ensure that the change in the tax code results in a compassionate and thoughtful deployment of your charitable funds that best serves you, your family and your community.

Please feel free to contact us at Phila Engaged Giving if you’d like help understanding the evolving community needs resulting from the introduction of the new tax code. We are happy to assist you as you navigate your philanthropic path forward.

Here’s wishing you a Happy and Prosperous New Year!